According to local media reports in South Korea, Samsung Group and Hyundai-Kia are going in opposite direction on corporate jets – a subject that is sparking heated debate as the country’s companies strive to cut costs.
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The Korea Times reports that Samsung is selling one of its three corporate jets as part of efforts to cut down on expenses, while Hyundai-Kia is buying one.
According to Samsung officials, the group is in talks with some unnamed buyers for the sale of one of three corporate jets it is operating.
“We are selling our Global Express jet, made by Canada’s Bombardier, for about $50 million,” a Samsung spokesman reportedly said.
But in contrast, Hyundai has just purchased a jet at the price of $60 million, reports say. The jet is currently being checked for maintenance and customs clearance before going into service.
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By GlobalDataThe purchase does not sit well with some as the company makes cost cuts elsewhere.
Comparisons are being drawn with the Detroit Three corporate jet controversy in Washington late last year. Rightly or wrongly, company jets are being increasingly seen as an extravagance that is out of step with increasingly tough times for companies.
Hyundai-Kia has reportedly defended its purchase by claiming that the jet, which reportedly costs 50 billion won in maintenance per year, is a necessity in doing global business.
The Boeing Business Jet 737 (BBJ-737) is big enough for 18 passengers and has the capacity to fly non-stop from Seoul to the Midwestern US. It will start servicing Hyundai executives in the first half of this year, the Korea Times said.
“Companies are bleeding money left and right now, so it’s not exactly encouraging to see another firm go out and buy itself a money-guzzling jet,” said one executive, speaking anonymously to the Korea Times.
The carmaker’s union claimed that the price of the jet won was enough to pay 245 temporary workers for 20 years.
